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In Forex trading there are 3 types of traders.

1. The Fear Driven Trader

2. The Market Driven Trader

3. The Risk Trader

 

The Fear Driven Trader

is likely to close a trade by panic seeing his trade skew to a loss or close a trade as soon as he/she makes a profit. Usually your new trader as he/she gets on his own feet to master the platform.

 

The Market Driven Trader

This type of trader knows most of the market's entry and exit points too well as he's a theory based trader. He analyzes the markets trades the news(trades by news announcements), has done some research and sets a take profit and stop loss rate. He succeeds more than he losses but may tend to make large losses if his long positions go against him

 

The Risk Trader

 

This trader spots entry points, spots the trend, takes a quick look at the market predictions under technical analysis and enters a trade. No stop loss or take profit set. He'll take the profit when it seems reasonable to him and his stop loss is an almost impossible to reach mark so he stays in the market for long. He too, can make losses but usually profits as he stays in the trade for long but not longer than 2-3hours

 

I won't lie, I'm more the risky, if you may, but rational? trader. Most technical analysis and trend following experts trade over a long period after analysing how far up the currency pair will strengthen or weaken (if they buy/sell of course). Being risky makes you learn more than being too cautious, I'm not saying not analyse any information but experts make it sound so complex whilst its something that only requires 4 simple steps.

 

1. In Forex trading the 1st thing you need to look at is the currency pair chart. This serves as an indicator to either buy or sell. The trend also serves as a helpful indicator since the probability of a buying/selling point may be reached once more in the market. To do this you can simply check the charts, spot a trend. The trend will determine whether you should buy or sell.

 

2. If the currency's strengthening this is a good buying point before it reaches a resistance level(where the chart will down swing again). If the currency's gradually decreasing, this is a good selling point

 

3. Technical Analysis assures you have clear market predictions. I recently bought the USD against the Yen and time and again the tech analysis is accurate. Though not 100% accurate most of my trades are conducted this way

 

4. Your trend corresponds, you've spotted a good buying and selling point now the last thing you should do is see the financial calendar. The calendar gives you market news and what has or is about to happen in the market and how that may affect the trade. After this step - TRADE.

 

 

To learn more about Forex trading or if you need a coaching session you can book one for FREE with Easy-forex. I personally trade with this broker since I learned to trade in a week since I'm assigned a specialised analyst who booked me a training session via Skype

and that has simplified trading for me.

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